Council Workers Face Changes To Local Government Pensions Scheme

AN AUDIT COMMISSION REPORT on the £130bn Local Government Pensions Scheme (LGPS) has raised concerns that the scheme only has funds to cover about three-quarters of its future liabilities.

The LGPS has 1.7 million active members; 1.1 million members with deferred pensions; and 1.1 million currently receiving pensions.

Although workers contribute to the fund, most of the money comes from their employers, the local authorities, and therefore, ultimately, from taxpayers. The government says that the pensions cost households hundreds of pounds a year.

To counter the shortfall, the commission’s proposals include: increasing employee contributions; raising the retirement age; and allowing local funds to adjust the benefits paid out.

Audit Commission Chief Executive, Eugene Sullivan, said that without corrective action the gap will widen.

’The scheme cannot continue as it is,’ Sullivan said. ‘Unfunded liabilities are being deferred, and this is storing-up problems for the future.’

Communities and Local Government Secretary, Eric Pickles, said the report ‘highlighted the need for change, to ensure fairness for all.’

‘A massive take of everyone's council tax bill is going on pension costs, rather than emptying bins weekly or cleaning the streets,’ he said.

‘Local taxpayers simply cannot afford to foot an ever-growing bill for town hall pensions - especially for highly paid senior officers and town hall chief executives.’